Verastem(US:VSTM)2023-05-09 20:18Financial Performance - The company reported a net loss of $15.7 million for the three months ended March 31, 2023, compared to a net loss of $17.0 million for the same period in 2022, indicating a reduction in losses year-over-year [140]. - Total revenue for the three months ended March 31, 2023, was $0.0 million, a decrease of 100% compared to $2.6 million for the same period in 2022 [148]. - Research and development expenses decreased by $1.6 million, or 12%, from $13.6 million in the 2022 Period to $12.0 million in the 2023 Period [149]. - Selling, general and administrative expenses increased by $1.4 million, or 24%, from $5.9 million in the 2022 Period to $7.3 million in the 2023 Period [155]. - Interest income for the 2023 Period was $1.0 million, an increase of 2022% compared to less than $0.1 million in the 2022 Period [157]. - Interest expense rose to $0.8 million in the 2023 Period, a significant increase of 1273% from $0.1 million in the 2022 Period [160]. - The change in fair value of preferred stock tranche liability was $3.4 million for the 2023 Period, with no liability reported in the 2022 Period [161]. - Net cash used in operating activities was $20.3 million for the 2023 Period, compared to $19.3 million for the 2022 Period [164]. - Cash provided by financing activities for the 2023 Period was $44.1 million, compared to $25.5 million for the 2022 Period [166]. Cash and Investments - As of March 31, 2023, the company had an accumulated deficit of $753.2 million and cash, cash equivalents, and investments totaling $111.2 million, expected to fund operations for at least the next 12 months [140]. - Cash, cash equivalents, and investments totaled $111.2 million as of March 31, 2023 [163]. - The company expects to finance cash needs through equity offerings, debt financings, collaborations, and licensing arrangements, which may dilute existing stockholders' ownership [199]. - The company has ongoing and potential future clinical trials that will impact commercialization activities and regulatory review outcomes [202]. Clinical Trials and Research - The company is advancing two registration-directed trials, RAMP 201 and RAMP 202, to evaluate the efficacy and safety of avutometinib alone and in combination with defactinib in patients with recurrent low-grade serous ovarian cancer (LGSOC) and KRAS G12V non-small cell lung cancer (NSCLC) [131]. - The combination of avutometinib and defactinib has received breakthrough designation from the FDA for the treatment of all patients with recurrent LGSOC, regardless of KRAS status [130]. - The company received a Therapeutic Accelerator Award from the Pancreatic Cancer Network for up to $3.8 million to support a Phase 1b/2 clinical trial of avutometinib in combination with defactinib for pancreatic cancer [138]. - The RAMP 203 trial, evaluating the combination of avutometinib with Amgen's KRAS G12C inhibitor LUMAKRAS, has advanced to Phase 2 dose expansion [135]. - The RAMP 204 trial, assessing the combination of avutometinib with Mirati's KRAS G12C inhibitor KRAZATI, is currently open and enrolling patients [136]. - The company plans to include mature data from the RAMP 201 study to potentially support filing for accelerated approval in patients with recurrent LGSOC [133]. - Continued enrollment in the combination arm of RAMP 201 is planned to expand clinical experience in anticipation of a confirmatory study [133]. - The company anticipates continued significant expenses and operating losses as it advances clinical trials and expands its intellectual property portfolio [196]. Financing Activities - The first tranche of the Private Placement closed on January 27, 2023, generating gross proceeds of $30.0 million [169]. - The company plans to sell and issue 944,160 shares of Series B Convertible Preferred Stock at a price of $31.77 per share, potentially raising approximately $30.0 million if certain conditions are met [170]. - The Series B Convertible Preferred Stock ranks senior to common stock and junior to all existing and future debt obligations [171]. - The company has entered into a loan agreement for up to $150.0 million, with an initial term loan of $25.0 million funded at closing and an additional $15.0 million funded upon achieving specific milestones [176]. - The term loans bear interest at a floating rate, with a minimum of 7.37%, and are due in full by March 1, 2027 [177]. - The company has a finance agreement with AFCO for $1.4 million at an interest rate of 7.4% per annum, requiring monthly payments of $0.1 million through October 2023 [182]. - The company borrowed a total of $40.0 million under a Loan Agreement, with interest rates subject to fluctuations based on the one-month CME Secured Overnight Financing Rate plus 7.37% [205]. Licensing and Revenue - The company sold its exclusive worldwide license for duvelisib to Secura for an upfront payment of $70.0 million, with potential milestone payments totaling up to $95.0 million [193]. - During the 2022 period, the company recognized $2.6 million in revenue from the sale of the COPIKTRA license and related assets [195]. - The company anticipates receiving milestone payments and royalties under the Secura APA, which will depend on the timing of such receipts [202]. - The company may need to relinquish valuable rights to technologies or revenue streams if additional funds are raised through collaborations or licensing arrangements [199]. Market Risks - The company is exposed to market risk related to interest rate changes, with a potential immaterial effect on the fair market value of its investment portfolio from a 100 basis point change in interest rates [201]. - A 10% increase in current interest rates would have resulted in an immaterial increase in cash interest expense for the three months ended March 31, 2023, due to the interest rate floor and cap [205]. - As of March 31, 2023, an immaterial amount of total liabilities were denominated in foreign currencies, indicating limited exposure to foreign currency fluctuations [204]. Contractual Obligations - The company has not reported any material changes in its contractual obligations and commitments since the last Annual Report [200].